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The Scranton/Wilkes-Barre metro area will begin 2013 with the state's highest jobless rate for the third consecutive year. The region has led Pennsylvania in unemployment since April 2010.

Despite positive signs at the beginning of 2012, the area's employment situation settled back into discouraging territory.

The metro area started the year with an 8.9 percent jobless rate in January that dropped to 8.7 percent in March, April and May. Unemployment jumped to 9.3 in June, stayed in the same range and settled at 9.5 percent in October, according to the latest data from the state Department of Labor and Industry.

"When unemployment rates are high, consumers get discouraged," said Dana Harris, a business professor at Keystone College in La Plume Twp. "It's not as bad as it looks."

There is reason for optimism about employment gains in 2013.

Total employment in the area expanded by 3 percent during the 12-month period ending in October, with 7,700 more people working, according to seasonally adjusted figures from the state.

During the same time span, though, the regional labor force grew by 9,200 people, a 3.6 percent expansion, state data show.

"We are seeing the labor force grow," Ms. Harris said. "The individuals that previously left the workforce are gaining some confidence."

Solid job growth emerged in several sectors in 2012.

Professional and business services employment expanded by 1,500, followed by leisure and hospitality, which added 1,300 jobs. Manufacturing and construction employment each grew by 800 jobs, and retailers added 500 to payrolls.

Although several regional school districts, including Riverside, North Pocono and Tunkhannock, reduced payrolls through layoffs in 2012, local education employment advanced by 400 positions during the 12 months ending in October, state data indicate.

The only industries to shed jobs locally were the government, hospital and information sectors; each lost 200 or fewer positions.

But hiring hurdles could remain from the "fiscal cliff" federal budget stalemate and the potential impact from the Affordable Care Act, commonly known as Obamacare, said Tim Kearney, Ph.D., director of the graduate program in business administration at Misericordia University.

"The hiring side might be a little more tentative at the beginning of the year," Dr. Kearney said.

"There is still a lot of uncertainty out there," Ms. Harris said.

Major layoffs occurred at two manufacturers in 2012.

Dove Industries, a vinyl window manufacturer in Hanover Twp., closed abruptly in August and put 106 people out of work after the company was unable to obtain financing to continue operations.

In August, General Dynamics reported it would lay off 60 people, about 25 percent of its workforce, in three rounds between October and December at its munitions plant in Scranton. General Dynamics blamed the furloughs on the expiration of two government contracts.

The prospects for 2013, though, look brighter than the outlook a year ago, Dr. Kearney said. "We are at an inflection point where the economy could do better," he said. "We are not in a boom time, unfortunately, but things continue to improve."

Contact the writer: jhaggerty@timesshamrock.com

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